Post Tagged with: "ubb"

The CRTC has announced plans to hold a consultation on whether information provided by incumbent companies on wholesale Internet access should be made publicly available. The CRTC has faced criticism for keeping much of the submitted information confidential rendering it difficult to fully assess the validity of cost claims.

TekSavvy announced a series of new pricing plans for its Internet services yesterday in the wake of the CRTC usage based billing decision. The focal point of most media coverage (National Post, CBC, Globe) is that costs are increasing by $3 – 4 per month, a move attributed to the CRTC decision which implements a capacity-based model for pricing of wholesale Internet services. While Peter Nowak says this portends a “dystopian future”, I remain far more optimistic.

The TekSavvy plans offer both cable and DSL services at different price points, speeds, and usage rates. For example, its fastest cable service offers 24 Mbps with 300 GB per month for $46.95 or an unlimited amount of data for $61.95. The DSL service offers even greater variety with higher price points for its fastest service and a very basic, cheap service of 3 Mbps with a 25 GB cap for $24.95 per month. The DSL service also introduces off-peak usage for the 300 GB plan with usage during off-peak periods not counting against the usage cap.

These plans are far superior to those offered by Rogers or Bell. The most comparable Rogers plan offers the same speed (24 Mbps) but imposes a 100 GB cap for $60/month. In other words, same speed, same price but 100 GB vs. unlimited data. The Rogers basic lite plan of 3 Mbps has a 15 GB cap for $35.95 per month (less data and significantly higher price). The Bell pricing is similar – its 25 Mbps service is $59.95/month ($27.48 for the first 12 months to get customers to switch) but comes with 100 GB cap. Its basic service costs $33.95 per month for 2 Mbps and just 2 GB of data.

Meanwhile, Montreal-based ISP Electronic Box has also announced new rates in Quebec that feature similar differences between cable (cheaper) and DSL services. In fact, the Electronic Box pricing is coming down for its cable package as consumers will be able to purchase a 60 Mbps service with a 250 GB cap for $54.95. The same speed service previously came with a 150 GB cap priced at $79.95. The DSL pricing is going up but the ISP also offers an off-peak plan that does not count against the cap and is longer than TekSavvy’s as it runs from 2:00 am until noon (TekSavvy until 8:00 am). By comparison, Videotron charges $82.95 for its 60 Mbps service with a 150 GB cap.

My column this week on the positive aspects of the CRTC’s usage based billing decision has generated some sharp disagreement, with some arguing that the pricing set by the Commission is faulty and virtually guaranteed to increase consumer prices (Search Engine covers the issue and arrives at the same conclusion, Peter Nowak does as well). The column pointed to the pricing concerns, but I think it is worth exploring the issue a bit further.

Questions about network costs are notoriously difficult to pin down. Earlier this year, I published a report that attempted to estimate the cost of a gigabyte of data and others have tried to do the same. The data relied upon by the CRTC is all subject to confidentiality and there have been concerns raised about its validity by both the independent ISPs and the incumbents (groups such as CIPPIC asked the CRTC to reconsider the issue of pricing in one of its interventions but the Commission declined). We should be clear – the lack of transparency associated with the numbers is a significant problem and must be addressed.

That said, I fear that part of the problem stems from years of limited Canadian competition with little innovation in the variety of broadband plans and services.

Last week, the Canadian Radio-television and Telecommunications Commission released its much-anticipated usage based billing decision. While the ruling only focused on the use of data caps (or UBB) as between Internet providers, the issue garnered national attention with over 500,000 Canadians signing a petition against Internet data caps and the government providing clear signals that it would overrule the Commission if it maintained its support for the practice.

My weekly technology law column (Toronto Star version, homepage version) notes the resulting decision seemed to cause considerable confusion as some headlines trumpeted a “Canadian compromise,” while others insisted that the CRTC had renewed support for UBB. Those headlines were wrong. The decision does not support UBB at the wholesale level (the retail market is another story) and the CRTC did not strike a compromise. Rather, it sided with the independent Internet providers by developing the framework the independents had long claimed was absent – one based on the freedom to compete.